One Tough Nut

Board member Richard Scorce
Chatham Green
Civic Center, Manhattan

Richard Scorce felt that his fellow shareholders had grown complacent. “People would just sit back, and they would just let things be.” And why shouldn’t they? Perhaps like the subject that has discovered “learned helplessness” – the principle of giving up because all actions are futile – most of the shareholders at the 420-unit complex known as Chatham Green had become passive.

It seemed like the nine-member board had been in power forever, and, according to Scorce, it frequently acted like a law unto itself. Favors were reportedly granted to board members, and whenever questions were raised, the board members would bully, bluff, or buy their way out of trouble. “They were very dictatorial,” says Scorce. “They used fear with all the shareholders, especially at election time. They would trade votes for favors, or say things like, ‘You will get a new paint job if you sign this proxy.’ It was getting bad.”

Scorce is not someone who rolls over easily. A lifetime resident of a rough-and-tumble Manhattan neighborhood – he grew up on nearby Mott Street – he moved into Chatham Green in 1975, partly because a number of his pals from the neighborhood had moved in. “That was the main attraction,” he recalls. “Stay in the neighborhood, if you could.” The award-winning design of the complex, which was completed in 1960, was impressive as well.

He was elected to the board nine years ago in a concerted effort to remove the long-entrenched board members. “Some of us got together to form a shareholder association, and we gradually knocked off the old board,” Scorce notes. “We had time. Terms were staggered, so we had three seats opening each year. Over three years, we had a whole new board.”

Scorce is a retired human resources (HR) staffer, and he brought that background to the board, where he currently serves as secretary. “In a way, it helped,” he observes, noting that in HR he had to evaluate people.

The new board had a lot on its plate. “When I was elected, the manager suddenly quit, the assistant manager quit, and so we were without a management company for about a month,” Scorce observes. “There were four of us basically in the office while we were searching for a new management company. So that really gave us a baptism of fire as far as how to run a co-op. I think that helped the most.”

But no matter how much you learn, there are still some things that can be beyond your control. In recent months, for instance, Chatham Green had a “horrible season.” As manager Orlando Torres recalls it, the contractors had just started work replacing one of the complex’s three roofs when a major thunderstorm struck on July 25, 2014. “It was terrible,” says Torres, who works for the Gerard J. Picaso division of the Halstead Property Group. “After we had exposed the area, it started raining and it came through in some of our commercial tenants’ spaces. But,” he adds, everyone – from the board and management to the contractor and the insurance company – “handled it well, minimizing the damage.”

Dealing with water woes is nothing new for the property. According to Torres, one of the commercial spaces had been dealing with recurring leaks for some time. “We had leaks for quite a while and they were patched here and there.”

Consisting of three buildings – one residential and two commercial – the co-op had some bad luck on its last major project, as well. A façade repair project took three years to complete and ended up with 26 change orders before it was completed this past fall. “That didn’t go so well,” admits Torres. “There were quite a few issues with the specifications. There was a lot of additional work that needed to be done that wasn’t indicated to the board before. It showed up when they were doing the jobs; some of it was caused by on-site conditions.”

But almost before the nine-member board could complete that particular project, it had to deal with the leaks. “The [commercial spaces] were constantly getting leaks into their offices,” recalls Scorce, who notes that the board first thought of repairing the roof a few years ago but was dissuaded from doing anything by its manager at the time. “He said, ‘Don’t worry about it. You would have to spend $70,000 to replace the roof. You can get by with repairs.’ So we did patch work. That was three or four years ago, and it didn’t work. We just threw the money away. We learned not to go for the quick fix.”

With Torres on the team, the board then hired engineer Patrick Chen of Design-Build Engineering to investigate the problem. He did a study reporting that the entire roof, including the sub-roof, needed to be replaced. That would be costly since the contractor would have to strip all previous roofs down to the the plywood girders. The board, with an eye toward this and future projects – a domestic heating and hot water plant, perimeter concrete/asphalt replacement – took out a second mortgage for about $6 million.

After examining multiple sealed bids, the board tapped Teamwork Restoration as the contractor. Initially, the job did not go smoothly. Besides damage dealt by the July 25 thunderstorm, deficiencies were discovered in the parapet wall. Says Torres: “Not only did we do a roof replacement but we were also forced to replace the parapet wall.”

With such challenges, no one would have been surprised if the board had hunkered down against expected criticism by the shareholders. Not so: it kept the shareholders in the loop. It sent out a letter, and the directors addressed the issues at a regularly scheduled shareholders’ meeting. “We have one every quarter,” reports Torres. “The board gives a report and then they have a Q&A session for about 35 to 40 minutes, where the shareholders ask questions and we answer. They were actually very understanding. They have a lot of common sense, so they understand the need for replacement.”

Ultimately, three roofs will have been replaced. The first, for the commercial space, 217 Park Row, began in May 2014. Although the roof replacement has been completed, the roof railing has not yet been installed. The cost will be $829,235.24. The roof replacement project for 1-5 Madison Street was started in October 2014 and finished in February 2015. That cost $155,057.64. The roof replacement project for 215 Park Row started October 2014 and was finished February 11, 2015, with a price tag of $265,578.20.

Scorce is pleased with the work, and, now that everything is back on track, hopes to be singing his swan song soon as he pushes a change that should force him off – and new members on – the board. A vote is scheduled for April on a change to the rules that would limit board terms. “The first time we tried to pass it, [a majority of] the shareholders didn’t vote for it,” he notes, adding that the majority should get behind it. “A lot of people like to complain, but they won’t step up. There seems to be a lot of that, and I think they should join; especially new shareholders coming in. They’re making quite a sizable investment. I think it’s time for them to get involved.”